Friday, October 03, 2008

Financial Times London: The US Congress on Friday passed the Bush administration’s $700bn financial rescue package after a tense week on Capitol Hill, but stocks fell sharply afterwards amid continuing turmoil in the credit markets.

The 263-171 vote in the House of Representatives, which rejected an earlier proposal only four days before, came after $149bn in tax breaks was added to the bill to help sway reluctant legislators to back the plan.

Reaction on Wall Street turned increasingly negative after the vote. The S&P 500 – which rose as much as 3.6 per cent ahead of the decision – fell 1.4 per cent, closing below its level on Monday after the House voted against the bill. It was the worst week for US stocks since markets re-opened after the September 11 2001 terrorists attacks.